Technologists have long promised the smart home, with automated lighting and intelligent climate control, whole-house audio-video and similar digital luxuries. Yet these high-tech habitats have mostly remained the province of either gadget-happy do-it-yourselfers or multimillion-dollar custom homes. But last week about 150 homebuilders from around the United States gathered at a posh resort in northern San Diego county — a hotbed of suburban construction—for a digital home conference. These were, moreover, mass-market home builders — the big firms that build hundreds or thousands of new homes each year with prices in the $250,000-$800,000 range.

Driving their interest isn’t so much technology — although that has indeed improved — as economics. As the recent housing boom slows down, new home builders need to find ways to compete with the used houses that are piling up on the market. Solution: the smart home.

“Digital features,” says Boyce Thompson, the editorial director of Hanley Wood, the building trade publisher that organized the conference, “are a big competitive advantage. Of the 8.2 million houses sold last year, seven million were existing homes with outmoded floor plans, obsolete home wiring and no home office space.”

While it’s possible to retrofit an older home with digital bells and whistles, it’s far cheaper and easier to trick out a new home. When the walls are open, additional wiring is relatively inexpensive to add and other amenities — such as a killer home theater system — can be painlessly financed over a thirty-year mortgage. What makes this strategy even more appealing is that home builders are now courting a new generation of younger buyers who consider technology a natural part of their lives.

Builders are already moving in this direction. Nearly 50 percent of the new homes sold in the U.S. last year had “structured wiring” — usually several Cat-5 wires for data and two coaxial cables for video distribution (and some builders add additional wires for audio). Even though wireless distribution of data, audio and video is rapidly improving, most experts agree that homeowners are better off having wires in place if possible. Whatever wireless is able to do, wires can do better and more cheaply, with the added benefit that there is no radio interference to worry about as the home airspace fills up with other wireless signals.

More important than technology, however, is the question of how home automation improves life for the homebuyer. One example: Mom drives home from shopping and when she presses a button on a remote control, the garage door opens, the house door unlocks, the thermostat turns up and the lights on the path to the kitchen turn on. No fumbling with keys or light switches when the arms are filled with groceries. Or Dad leaves the house and once outside realizes that lights have been left on upstairs — again, a touch of the remote control (which may actually be built into the car dashboard) turns the lights off. According to one speaker, that level of functionality can now be built throughout a new home for as little as $8,000, using a combination of wired and wireless components.

Another important new feature is the Web-enabled house — the idea that wherever you are in the world, you can call up a Web page that lets you check on the status of your home, lock or unlock doors, and adjust lighting and temperature. Or your house can send you messages. Door sensors can tell you when (or if) the kids have arrived home; a motion sensor can tell you whether Grandma got out of bed this morning. One speaker claimed that the most commonly stolen item in homes is prescription drugs, often by workers such as cleaners or baby-sitters. “Your house can text you,” he said, “that your medicine cabinet was opened at 10:45 this morning.”

Both Microsoft and Intel sent top executives to meet the home builders, Intel to push its Viiv brand of chips for home electronics and Microsoft to extol a vision of the smart home with the Media Center PC as the central control interface. Brands familiar to home builders — Leviton, Honeywell, Lutron — were also much in evidence, explaining how they will fit into this new digital world. The familiar names were important: building large residential developments is an assembly-line operation. Anything new or untested can throw off the schedule, so the mass-market builders are more comfortable with brands they know.

Nonetheless, some interesting startups showed up as well, such as SmartLabs and Lagotek, based around emerging wireless standards like Insteon, Z-Wave and ZigBee. Wireless is important, because even with plenty of wires in the walls, the homeowner is likely to buy additional lights and appliances over the years that need to be added to the home network. Wireless connections will be the easiest for consumers to integrate — in fact, some appliances and home electronics may soon come with wireless connections built-in. In the end, smart homes will probably end up with at least two networks — one predominately wired (but with some wireless elements) for audio, video, and data, and another wireless network carrying the control signals that adjust lights and thermostats. Sometimes the two networks will cross over, as when a wireless tablet or PDA is used to control lights or appliances.

If that’s all starting to sound a little complicated, you’re right. And that is perhaps the biggest challenge that the home builders face. In the end, they’re inheriting the technology of the computer industry, which has never managed to figure out that “easy to use” must mean easy to use. “Housewives,” said one speaker, “aren’t going to be happy if they have to reboot their houses.” There was a touch of chauvinism in his tone, but also some truth: the WAF, or “wife acceptance factor,” was frequently discussed during presentations. Until now, smart homes have been a predominately male preoccupation, motivated by geekdom or conspicuous consumption. But if smart homes are going to catch on among soccer moms, they’ll have to be more than just intelligent: they’ll also need to make home sweet home just a little bit sweeter.